Estate Planning Archives - Page 18 of 20 - Lonich Patton Ehrlich Policastri

How Can Business Succession Planning Help You Pass Your Company On to Your Children?

March 11, 2011/in Estate Planning /by Michael Lonich

A business succession plan can help you hand your business over to your family’s next generation by looking at whether or not your company has adequate resources and potential. If your business does not presently have the qualities required to pass on to your children, an attorney can help you investigate whether the necessary resources and potential can be developed.

An estate planning attorney can help you develop a quality business succession plan that meets your needs. Specifically, an estate planning lawyer can help you use instruments such as revocable trusts, irrevocable trusts, and charitable trusts to own and control the equity interests of your business. In addition, your attorney can help you minimize the impact of local, state, and federal taxes on business and estate planning transactions to conserve the assets of the company.

For more information on developing a successful plan to pass on your business after your death, please visit the Lonich Patton Erlich Policastri website. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Special Rules that Regulate Transfers to Non-U.S. Citizen Spouses Can Affect Estate Planning

February 18, 2011/in Estate Planning /by Michael Lonich

Estate planning can be particularly challenging for couples if one spouse is the citizen of another country. It is important for California residents, who are married to non-citizen spouses, to consider the special regulations surrounding estate tax marital deductions when creating an estate plan.

First, there is no standard estate tax marital deduction for a spouse who is not a U.S. citizen. While this may seem unfair, the rationale behind the estate tax marital deduction was to defer the tax until the death of the second spouse. If the non-citizen spouse moved out of the country after the death of the first spouse, he or she could not be subjected to the deferred taxation. However, if the non-citizen spouse becomes a citizen before the federal tax return is filed, the standard unlimited marital estate tax deduction will apply.

Second, while there is no gift tax marital deduction for lifetime transfers to a noncitizen spouse, there is an annual gift tax exclusion. The exclusion amount allowed for transfers during life to a non-citizen spouse was $133,000 in 2009.

For more information on how to create an effective estate plan, please contact our attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Charlie Sheen’s Family May Seek Conservatorship

February 8, 2011/in Estate Planning /by Michael Lonich

News of Charlie Sheen’s intense lifestyle revolving around drugs, alcohol, and parties, has been circulating around the press for months. Just recently, an article published by NY Daily News, discusses the possibility of Sheen’s parents trying to obtain a conservatorship over the party boy actor.

A conservator is a responsible individual who is appointed by a judge to care for another adult who cannot care for either himself or his finances. A person who believes they would make an effective conservator for a loved one, can file for conservatorship in court. A spouse, relative, or state or local government agency, friend, or any interested person can file for conservatorship.

There are two types of conservators. The first type is known as the “conservator of the estate.” A conservator of the estate handles the finances of the conservatee. The second type of conservatorship is the “conservator of the person.” This is a conservator who looks after and protects a person in relation to their healthcare, living arrangements, etc.

If you are interested in learning more about California conservatorships, please contact our attorneys at Lonich Patton Erlich Policastri for more information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Source:

New York Daily News

Unmarried Couples Living Together May Need a Cohabitation Agreement to Implement an Effective Estate Plan

February 2, 2011/in Estate Planning /by Michael Lonich

Cohabiting unmarried couples, who are not registered domestic partners, may be left financially vulnerable if they do not have an enforceable estate plan in place. A “cohabitation agreement” can help unmarried couples effectively plan for the distribution of their property upon death. A cohabitation agreement is a formal contract entered into by both of the cohabiting parties. Specifically, a cohabitation agreement addresses issues relating to rights and ownership of assets, support and maintenance, and division of property upon the dissolution of the relationship or death of one of the parties. These agreements are usually enforceable unless they are explicitly founded on meretricious sexual services.

The division of the couple’s assets at death is governed by California contract law and not community property law. This means that property acquired during the relationship of non-married couples is not considered “community property.” Therefore, upon the death of one party, the surviving partner is not necessarily guaranteed a portion of the assets the couple acquired during their relationship. Moreover, because California community property law does not apply in this situation, the names on the title of property often determine how assets are divided upon the death of one of the partners. A cohabitation agreement serves to ensure that both parties’ wishes are honored upon their passing.

For more information on cohabitation agreements or how to protect your partner after you pass, please talk to Silicon Valley estate planning attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

California Blended Families Face Unique Challenges When Developing Comprehensive Estate Plans

February 1, 2011/in Estate Planning /by Michael Lonich

Creating a successful estate plan for blended families can be extremely complicated for a number of reasons.

First, it is often challenging for spouses to identify and agree on who should be the named beneficiaries. For example, a spouse who has children from a prior marriage may want those children to share in his or her estate at death. Yet, if there is a tense relationship between the stepparent and the children from the prior marriage, the stepparent may resent or discourage naming those children as beneficiaries.

One of the most important tasks for spouses of a blended family is to reach an agreement on their priorities. For most spouses with modest estates, the primary goal of the estate plan is to provide for the care of the widowed spouse and minor children from the current marriage. The decedent’s older children are often considered secondarily. However, if the spouses have a larger estate, their goals may focus on a more equal division of assets between surviving family members.

In order to meet the estate planning needs of a blended family, a “bypass trust” may be used. A bypass trust is an irrevocable trust that is funded with the deceased spouse’s separate property and his/her share of the community property. The surviving spouse would be the lifetime beneficiary of this trust with the deceased spouse’s children often designated as the remainder beneficiaries. Essentially, the proceeds of the bypass trust would be available to meet the lifetime needs of the surviving spouse while ensuring that the deceased spouse’s remaining property is ultimately distributed as the deceased spouse wanted. However, a bypass trust is not appropriate for every blended family as the surviving spouse may deplete the trust assets during his/her lifetime and leave nothing for the stepchildren.

For more information on what types of estate planning instruments can best meet the needs of your blended family, please contact Bay Area wills and trusts attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Passing Your Vacation Home to the Next Generation

January 27, 2011/in Estate Planning /by Michael Lonich

A family vacation home is more than just a piece of real property. It is a place where cherished memories are made by the dozens. It is also an asset that some individuals hope to pass down from generation to generation. If you feel this way about your vacation home, you can develop an estate plan that accomplishes your goal of keeping your valuable property in the family.

A California estate planning attorney can help you transition ownership of your valued home to the next generation while reducing tax implications. You may be interested in tailoring an estate plan that slowly transfers ownership of the home to the next generation of family members during your lifetime. This option utilizes federal tax law so that you can reduce your estate tax by taking advantage of lifetime gift tax deductions.

For more information about estate plans tailored to your specific needs, please contact our San Jose estate planning attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

New Federal Regulations Increase Hospital & Visitation Rights for Same-Sex Couples

January 25, 2011/in Estate Planning /by Michael Lonich

Earlier this month, new federal regulations pertaining to hospital visitation became effective. These regulations require hospitals receiving federal Medicare or Medicaid money to have written visitation policies in place. The new law also requires hospitals to inform patients (or a patient’s representative) of their rights regarding visitors.

The new regulations require federally funded hospitals to allow patients to designate their own visitors. The new law also requires hospitals to allow patients the right to make personal decisions regarding whom they will appoint to make medical decisions on their behalf, regardless of gender or sexual identity. Hospitals refusing to comply with these new regulations will risk losing funding. These new regulations largely increase the rights of same-sex couples in relation to medical decisions.

If you live in California, and if you are interested in protecting your right to appoint a representative to make healthcare decisions during your incapacitation, you may be interested in learning more about an advanced healthcare directive or a durable power of attorney. An advance healthcare directive allows you to appoint a specified individual to make healthcare decisions based upon your specific wishes in the event you become incapacitated. A durable power of attorney allows your appointed agent to address your financial and property issues when you are unable to do so.

For more information on a durable power of attorney or an advanced health care directive, please contact us. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Sources: The Huffington Post; The Columbia Dispatch

Four Tips for Ensuring Your Pet is Cared for After Your Death

January 19, 2011/in Estate Planning /by Michael Lonich

Sue Stevens, a financial planner and founder of Stevens Wealth Management, discusses estate planning for pets in her book, “Put Your Money Where Your Heart Is.” In the book, Stevens lays out four steps that anyone can take to protect their pet after they’re gone.

First, Stevens suggests that you choose a “pet guardian” and name this person in a trust. This should be the person that you want to care for your pets. In addition, make sure to name at least one back-up guardian in case your first choice is unable or unwilling to serve.

Second, decide how much money you want to set aside in a trust for your pet’s care. According to an American Pet Products Association survey, dogs generally cost around $1,400 per year while cats can cost approximately $1,000 per year. One of the best ways to ensure your pet is provided for is to set up a trust for your pet. The trustee of the pet trust does not have to be the same person that you choose as the pet’s caregiver (guardian).

Third, make sure to include provisions in your trust which provide for pet care. Specifically, the trust should include language that details how the money is to be spent (i.e. food, veterinary care, etc). Also, the trust should include a provision for interim care until your pet can be placed in a permanent home. An estate planning attorney can help you draft an effective trust for this purpose.

Lastly, leave written instructions for your pet’s caregiver (guardian). This information should include your pet’s medical record, feeding instructions, a list of favorite toys, and even the names of your pet’s human and furry friends. Please click here for the full article.

If you would like more information about how to plan for your dog or cat’s care after your passing, please contact our experienced Silicon Valley estate planning attorneys at Lonich Patton Erlich Policastri. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

2011 Tax Changes: Gift Tax, Estate Tax, Portability

January 14, 2011/in Estate Planning /by Michael Lonich

General Overview of 2011 Tax Changes

The “Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010” (TRA) was signed into law on December 17, 2010. The TRA applies to the years 2011 and 2012. This Act was passed to address the expiration of two major tax bills[1]. These two tax-cut bills expired at the end of 2010. The TRA extends certain provisions of these bills and also provides amendments to the tax system.

2011 Gift Tax

Starting in 2011, the gift tax exemption amount will increase from $1 million to $5 million. The exemption for couples is $10 million.[2] Gift tax is again unified with the estate tax. For 2011, the “unified” applicable exemption amount is $5 million per person, and in 2012 this amount is subject to being indexed for inflation.”[3] The tax rate is set at 35%.[4] The annual exclusion for tax-free gifts remains $13,000 per donor.[5] A donor may make an unlimited number of $13,000 gifts as long as they are to different individuals.[6]

2011 Estate Tax

Under the TRA, the “applicable credit amount is the amount of tax with respect to an applicable exclusion amount of $5 million.”[7] Starting in 2012, the applicable exclusion amount will be indexed for inflation, with adjustments rounded to the nearest $10,000. The maximum rate of estate tax is 35%.[8]

2011 Portability

Under the TRA, the new tax structure will “allow a decedent’s estate or a donor to tax advantage of the applicable exclusion amount of the decedent’s or donor’s previously deceased spouse. This ‘portability’ concept is intended to prevent families from incurring gift and estate tax that could have been avoided through planning prior to the death of the predeceased spouse.”[9] Under the new tax law, “when computing the applicable exclusion amount for a donor’s or a decedent’s estate, the [deceased spousal unused election amount] is added to the donor’s or decedent’s [basic exclusion amount].”[10]

For more information about 2011 estate planning, please contact our experience attorneys. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

[1] Both the “Economic Growth and Tax Relief Reconciliation Act of 2001” (EGTRRA) and the “Jobs and Growth Tax Relief Reconciliation Act of 2003” (JGTRRA) were set to expire at the end of 2010. [2] U.S. Senate Committee on Finance, “Summary of the Reid Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010,” p. 4. The ABA materials did not state the couple exclusion as $10 million, but it makes sense if it is $5 million per person. [3] ABA Summary of Tax Relief Act 2010, p. 6. [4] Id. [5] “Tax Changes for 2011: A Checklist,” The Wall Street Journal, Laura Saunders. [6] Id. [7] ABA Summary of Tax Relief Act 2010, p.9. [8] Id. [9] ABA Summary of Tax Relief Act 2010, p. 11. [10] Id.

The Importance of an Advance Health Care Directive

January 5, 2011/in Estate Planning /by Michael Lonich

An advance health care directive is a written instrument that describes your health care wishes in the event of your incapacity or injury. It serves to inform family members and healthcare professionals about your wishes and desires when you are unable to do so. The importance of having an advanced health care directive is often overlooked.

An advance health care directive can address several key issues, including whether or not you want doctors to resuscitate you if you stop breathing or if your heart stops, if and when to use breathing machines or dialysis, and whether you wish to be an organ and tissue donor. While many people prefer not to think about their own mortality, it is important that your loved ones know your desires before it is too late for you to express them. In addition, an advance health care directive allows you to choose an agent to act as your attorney-in-fact. Your attorney-in-fact is the person you designate to make health care decisions for you. Appointing such a person in advance often helps alleviate family tension during difficult times.

To find out how you can protect your family by incorporating an advance health care directive into your estate plan, please contact our estate planning attorneys at Lonich Patton Erlich Policastri for more information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.